GHY Tradelines

(STR Trade Report)

U.S. Customs and Border Protection has determined the approach it will mostly likely take over the next five to seven years to enhance its response to emergent border security threats along the U.S.-Canada border while advancing trade and travel facilitation. The Detection, Inspection, Surveillance and Communications Technology Expansion Alternative will focus on increased patrol activity and deploying more and better technologies to support CBP’s detection, inspection and surveillance capabilities and operational communications. CBP states that this alternative is consistent with current statements of national policy with regard to northern border security and trade and travel facilitation goals.

According to CBP, the release of this final determination concludes a process of assessment of the potential for agency activities to impact the environment along the northern border and recommends what measures CBP anticipates it will routinely consider to reduce the potential for environmental harm from its actions. Other alternatives studied included no action (continuing with the same facilities, technology, infrastructure and approximate level of personnel currently in use, deployed or currently planned), facilities development and improvement (new permanent facilities or improvements to existing facilities, including ports of entry), tactical security infrastructure development (constructing additional barriers, access roads and related facilities), and flexible direction (allowing CBP to follow any of the above directions as deemed necessary).

CBP chose not to utilize the flexible direction alternative because it is more resource intensive than the risk-based approach envisioned for enhancing border security. However, the agency has previously said that changes in the nature, intensity or locations of cross-border threats, or changes in national security or trade, travel and economic priorities, may compel it to adopt this alternative in the future.
 

(CBP)

U.S. Customs and Border Protection and Vancouver Airport Authority announced today a new program, Automated Passport Control, an expedited customs entry process that will allow eligible passengers traveling from Vancouver International Airport (YVR) to the U.S. to clear customs more efficiently, while still ensuring the same high standard of safety and security. This partnership is the first-of-its-kind and aims to help travelers move more quickly through the CBP preclearance inspection process by allowing entry of passport information at a self-service kiosk.

“Increasing efficiency and streamlining processes are critical components of CBP’s modernization efforts at ports of entry,” said Thomas S. Winkowski, acting CBP Commissioner. “Travelers will still speak with a CBP officer after using the Automated Passport Control kiosks, however this will allow for faster processing and increased focus on the traveler.” Read more here.
 

(Burnaby Now)

Yes, everyone’s in a tizzy since the Americans announced they’re considering charging a fee to Canadian border crossers.

While bridges across the Lower Mainland are springing up with tolls, we’ve always taken it for granted that a trip to the States will be gratis.

Well, for a certain value of free. A border crossing fee, especially one of $1 to $10, won’t deter anyone from making a once-a-year trip to see Disneyland or their American friends or relatives.

But there are those who cross the border every day – truckers, mostly, but some folks choose to live in Canada and work in the U.S., or vice versa. Read more here.
 

The Federal Trade Commission is accepting comments through July 8 on a proposed rule that aims to clarify and update the Textile Labeling Rules and make them more flexible, giving businesses more compliance options without imposing significant new obligations.

The Textile Rules require that certain textiles sold in the U.S. carry labels disclosing the generic names and percentages by weight of the fibers in the product, the manufacturer or marketer name, and the country where the product was processed or manufactured.
 

(MM&D)

Canadian manufacturers fear even more fees may be looming at the Canada-U.S. border as the U.S. Department of Agriculture (USDA) recommends revenue-generating measures that could result in higher costs.

In a presentation to stakeholders in the U.S. capital this week, the department suggested new border fees because some federal agencies, including U.S. Customs and Border Protection (CBP), are currently providing free services at America’s borders.

CBP works in collaboration with the USDA’s agriculture quarantine and inspection program, which provides checks of imported agricultural goods and commercial aircraft, rail cars, ships and even passenger baggage to prevent harmful pests, diseases and materials from entering the U.S.. “Approximately $191 million in CBP costs are associated with services for which no fee is currently charged,” the department’s presentation stated. U.S. federal agencies “need to recover all costs associated with fee services and have fee revenue from each fee service cover the associated costs.” In conclusion, it said: “Consider establishing new fees.” Read more here.
 

(USA Today)

Delivery trucks from Mexico line up early in the morning at the border crossing in Tijuana, where 20 million flat-screen TVs were manufactured last year. Traffic studies found cargo trucks, even empty ones, wait 90 minutes on average to cross into the USA as U.S. Customs agents check vehicles for contraband, and then spend at least an hour waiting to get back into Tijuana.

“Trucks that are a critical element of a competitive supply chain may spend three to four hours waiting in line during a day,” says Kenn Morris, president of the Crossborder Group, a San Diego consultancy, which commissioned the traffic studies. “These kinds of delays are both too typical and really strangle border economies … and put more barriers between what should be two strong economic partners.”

Improving on the way goods flow from Mexico to the USA is what President Enrique Peña Nieto intends to emphasize Thursday when President Obama visits Mexico City. […] U.S.-Mexican trade has risen as Mexico becomes an increasingly attractive locale for U.S. manufacturers that are seeing the cost to produce goods in China go up. Trade between Mexico and the USA topped $500 billion in 2012. Read more here.
 

(STR Trade Report)

A May 1 message from U.S. Customs and Border Protection suggests that participants in the Customs-Trade Partnership Against Terrorism need to improve their reporting of suspicious activities, anomalies and security breaches. The message appears designed to reassure participants that such reporting will not result in negative consequences. CBP notes that it is working to ensure that this practice is also required and encouraged by Mexico’s supply chain security program, the New Scheme of Certified Companies, as it is by Canada’s Partners in Protection Program.

CBP states that if a C-TPAT partner reports suspicious activities, anomalies or security breaches prior to CBP’s discovery, the company will not be immediately suspended from the program. The goal of C-TPAT is to secure the international supply chain through cooperation and information sharing, the message states, and such reporting demonstrates that the partner’s security procedures are functioning. While reporting a breach will result in an immediate joint review of the totality of circumstances, a swift and proactive response to a breach is a factor considered during that review. If CBP determines that the C-TPAT partner exhibited due diligence, followed its established security procedures and has proactively enhanced its security practices following the incident, the company will not be suspended from the program. However, if the review indicates that the partner failed to meet the minimum security criteria, follow its own established security procedures or adequately address the security vulnerabilities that led to the breach, a suspension may be necessary until CBP can ensure that all potential security vulnerabilities are addressed.
Read more »

(Randy Boswell – Postmedia News)

Three U.S. lawmakers have launched a bid to scrap the “dysfunctional” binational agency that has overseen operation of the Peace Bridge between Ontario and New York for nearly a century, part of the escalating fallout from a dispute over planned improvements to the U.S. approach to the crossing that has pitted Canadian board members against their American counterparts.

The Buffalo and Fort Erie Public Bridge Authority — commonly known as the Peace Bridge Authority — and the key international link it has administered since 1923 have been hailed as symbols of the enduring friendship between the U.S. and Canada after the War of 1812, the key battles of which were fought near the present site of the Niagara River bridge that connects Fort Erie, Ont., and Buffalo, N.Y Read more here.
 

(STR Trade Report)

President Obama is expected to announce this week his intention to nominate Michael Froman as U.S. trade representative and Penny Pritzker as commerce secretary.

Froman currently serves as Obama’s deputy national security adviser for international economic affairs and is generally regarded as an experienced negotiator with close access to the president. These traits are likely to be key to successfully concluding and then securing congressional approval of sweeping free trade agreements with 11 Asia-Pacific countries as well as the European Union. A Financial Times article quoted a former Bush administration official as saying that “Mr. Froman as USTR is good news for all those wishing to see a more globally engaged United States.”

Pritzker is a Chicago businesswoman who played significant roles in the president’s 2008 and 2012 campaigns. Press reports indicate that she was considered for the position of commerce secretary during Obama’s first term and has undergone a “long vetting process” this time around.

Both Commerce and USTR are currently without Senate-confirmed chiefs, as former USTR Ron Kirk departed in March and former Commerce Secretary John Bryson left for health reasons last summer. Deputy USTR Demetrios Marantis is currently serving as acting USTR and will likely return to that post once Froman is confirmed. Acting Commerce Secretary Rebecca Blank will take the position of chancellor of the University of Wisconsin this summer.

Still unclear is whom the president will nominate as commissioner of U.S. Customs and Border Protection, which is currently being helmed by Acting Chief Operating Officer Thomas Winkowski after Acting Commissioner David Aguilar retired March 30.
 

(STR Trade Report)

Effective May 1, the European Union will significantly increase the additional tariffs it levies on certain imports from the United States in response to the continuing distribution of antidumping and countervailing duty revenues to U.S. producers. Women’s denim trousers, which had been dropped from the EU retaliation list several years ago, will be hit with a 26% additional tariff, bringing the total import duty for the period May 1, 2013, through April 30, 2014, to 38%. Additional tariffs on frozen sweet corn, crane trucks, and metal eyewear frames and mountings, which had been set at 6% for the past year, will also be increased to 26%.

In an effort to further discourage unfair trade practices, the Continued Dumping and Subsidy Offset Act, or Byrd Amendment, allowed the distribution of AD/CV duty revenues to affected domestic producers for qualified expenses. Congress repealed the law in 2006 in response to an adverse World Trade Organization decision but specified that AD/CV duties collected on entries made until Oct. 1, 2007, could still be distributed, a process that remains ongoing due to the retrospective nature of the United States’ AD/CV duty system.

The additional tariffs the EU imposes are revised annually in correlation with the amount of AD/CV duty revenues distributed the previous year. U.S. Customs and Border Protection officials say that while the total amount of money available for distribution will decline over time, the specific amounts available from year to year may rise or fall depending on the total amount of AD/CV duties collected, which itself can be affected by a number of factors. For example, the conclusion of litigation affecting a large volume of entries of goods subject to AD or CV duties could result in the liquidation of those entries and therefore the release of a significant sum of duty revenues for distribution. Or, CBP may have been successful in its efforts to recover AD/CV duties that had previously gone uncollected for some reason, which sometimes total in the millions or even tens of millions of dollars.

Distributions of AD/CV duties collected on imports from the 27 EU member states apparently increased from $4.44 million in FY 2011 to $84.4 million in FY 2012, thus prompting the rise in retaliatory tariffs. It is not clear what accounted for this increase or whether it may be repeated in the future, considering that the retaliation amount had previously declined for several years.

ST&R’s U.S. and EU offices are working to help affected companies formulate both short-term tactical and longer-term strategic options. For more information, contact ST&R managing partner Tom Travis at 305-894-1001 or or via email.
 

(STR Trade Report)

U.S. Customs and Border Protection officials recently said they hope to begin by October a pilot program aimed at easing the requirements associated with the entry of containers with cargo residue.

In July 2009 CBP modified all earlier rulings to provide that re-imported instruments of international trade (containers) made of any material that have residues of any type of cargo may not be entered or manifested as empty and that the cargo residue contained, regardless of the amount, must be classified, entered and manifested. CBP said this policy change was intended to address risks to national security and the health and safety of its officers. The agency acknowledged trade community complaints about the effect of this change, including the expense of compliance, increased border congestion and challenges in providing accurate information, by subsequently delaying enforcement indefinitely.

Read more »

(CBP)

On behalf of the United States and the Federal Republic of Nigeria, U.S. Customs and Border Protection (CBP) Acting Commissioner Winkowski and Nigeria Customs Service Comptroller General Abdullahi Dikko Inde signed a Customs Mutual Assistance Agreement (CMAA) today, which marks a significant milestone in collaboration between the two countries.

The bilateral agreement is a valuable tool for CBP and U.S. Immigration and Customs Enforcement (ICE) in cooperation with the Nigeria Customs Service to prevent, repress, and, investigate customs offenses. CMAAs provide for mutual assistance to ensure the accurate assessment of customs duties and taxes, and in efforts to combat illicit cross-border activities to include contraband smuggling, financial crimes such as customs fraud and money laundering, and international terrorism. Read more here.
 

(CBP)

On April 18, 2013, CBP announced the opening of three new Centers of Excellence and Expertise (CEE): Base Metals in Chicago; Industrial & Manufacturing Materials (IMM) in Buffalo, N.Y., and Machinery in Laredo, Texas. The virtual centers are the product of extensive collaboration between industry stakeholders and CBP. CBP is currently accepting applications from importers to participate in the new Centers. Importers interested in participating in a Center can apply through the Federal Register Notice.

The IMM CEE located in Buffalo, NY is comprised of a wide range of raw, partially processed and processed materials used for a variety of purposes. In general, the IMM CEE will be handling the following: Ceramics; Glass; Leather; Lightbulbs; Paper; Plastics; Precious Metals and Stones; Prefabricated Buildings; Rubber; Stone, Cement and Plaster; and Wood. The attached spreadsheet provides a more detailed list of the HTS numbers (to the fourth digit) along with heading descriptions.

The IMM CEE can be contacted via email at CEE-IndustrialMaterials@cbp.dhs.gov or by phone at (716) 843-8504, Monday through Friday 8:00 am to 4:30 pm Eastern Time. Callers/Emailers will be asked to describe their concerns or experience and provide contact information. An IMM CEE representative will provide a prompt response.

The complete press release announcing the opening of the three new Centers can be viewed via the web here. Further information regarding the Centers of Excellence and Expertise is available here.
 

(Imperial Valley News)

USC announced the National Center for Risk and Economic Analysis of Terrorism Events (CREATE) completed a study that estimates the impacts of wait times at major ports of entry on the U.S. economy due to changes in customs and border officers staffing.

The study concludes adding 33 customs and border protection officers (1 at each of the selected 33 land and airport locations studied) will potentially lead to an increase in GDP of $61.8 million and employment gains of 1,053 jobs in the U.S.

“We estimate that every additional officer, if placed at ports of entry with high traffic volume would, on average, lead to 33 additional jobs being stimulated indirectly in the U.S. economy,” said Adam Rose, principal investigator of the study and Professor of Public Policy at the USC Sol Price School of Public Policy. He also noted this outcome is not a standard “multiplier,” which pertains to ordinary economic activity, but instead refers to the gains from alleviating potential bottlenecks at peak times. Read more here.
 

Written testimony of DHS Management Directorate, U.S. Customs & Border Protection, U.S. Immigration & Customs Enforcement and the Transportation Security Administration for a House Committee on Homeland Security, Subcommittee on Oversight and Management Efficiency hearing titled “The Impact of Sequestration on Homeland Security: Scare Tactics or Possible Threat?”

“While our recently enacted appropriations will help DHS to mitigate – to some degree – the impacts of sequestration on our operations and workforce that were originally projected under the FY 2013 Continuing Resolution (CR) enacted on September 28, 2012, there is no doubt that these cuts will affect operations in the short- and long-term. Lines and wait times at our ports of entry (POEs) are longer, affecting travel and trade; the take home pay of the men and women on the frontlines will be reduced; and employees across the Department as well as the public we serve face uncertainty based on sudden budgetary reductions that must be met by the end of the year. The long-term effects of sustained cuts at these levels will result in reduced operational capacity, breached staffing floors, and economic impacts to the private sector through reduced and cancelled contracts. In spite of the substantial and far reaching cuts mandated by sequestration, we will continue to do everything we can to minimize impacts on our core mission and employees, consistent with the operational priorities in our 2014 budget.”

Click here to read the complete testimony.
 

(STR Trade Report)

The fiscal year 2014 budget proposal released by President Obama this week includes funding increases for many federal agencies with trade-related responsibilities.

Commerce

- $520 million (up $64 million from FY 2012) for the International Trade Administration to support the National Export Initiative, including $22 million for the Interagency Trade Enforcement Center and $20 million to support implementation of the SelectUSA program, which encourages foreign direct investment in the U.S.

- $12 million for the Economic Development Administration to create a Regional Export Challenge, a competitive grant program that will support U.S. regions that develop and implement sustainable export action plans to proactively identify and support firms and sectors with the greatest export potential

- $112 million (up $11 million) for the Bureau of Industry and Security to support ongoing work under the Export Control Reform Initiative, including an additional $8.3 million for expanded export licensing and enforcement operations as controlled items shift from State Department jurisdiction

- the expansion of export control officers to Germany (covering Europe), Turkey (covering Malta, Cyprus, Syria, Jordan, Egypt, Lebanon and Israel) and the United Arab Emirates (covering Pakistan, Bahrain, Iraq, Kuwait, Oman, Qatar, Saudi Arabia and Yemen)

- organizational changes such as focusing on higher priority enforcement and compliance activities such as antidumping and countervailing duty casework and ITEC; reducing the number of Global Markets specialists who combat non-tariff barriers in customs, standards and transparency in markets that are not priorities or have a limited return on investment; and consolidating GM staff to cover priority markets such as free trade agreement partners, emerging markets such as China and India, and next tier markets such as Turkey and Indonesia

CBP

- $12.9 billion for U.S. Customs and Border Protection, including $221 million for 1,600 new CBP officers and mobile equipment to speed the processing and inspection of passengers and cargo at U.S. ports of entry

- $3.3 million for the automation and centralization of CBP processing of all single transaction bonds

- increases in customs inspection user fees

- transfer of land border port of entry facilities from the General Services Administration to CBP

FDA

- an additional $295.8 million to bolster the Food and Drug Administration’s food safety efforts, primarily through implementation of the Food Safety Modernization Act

- new user fees for food facility registration and inspection, food importers, and cosmetics and food contact substance notifications

- a $10 million increase for FDA efforts to detect and address the risks of food and medical products and ingredients manufactured in foreign countries

Other Trade Agencies

- $85.1 million for the International Trade Commission (up $5.1 million)

- $56.2 million for the Office of the U.S. Trade Representative (up $5 million)

- $117 million for the Consumer Product Safety Commission (up $2 million)

- $25 million for the Federal Maritime Commission (up $1 million)

(STR Trade Report)

U.S. Customs and Border Protection has posted to its Web site its annual performance and accountability report, which indicates that fiscal year 2012 saw a decline in several measurements related to compliance and supply chain security programs. Details revealed in this report include the following.

Compliance
The percentage of imports compliant with applicable U.S. trade laws, including customs revenue laws, fell for the second straight year to 96.46%, below the goal of 98%. CBP attributes the decline to classification errors by importers.

C-TPAT
The compliance rate for members of the Customs-Trade Partnership Against Terrorism with established program security guidelines declined to a five-year low of 94.5%, compared to 95.1% in FY 2011. CBP explains that a number of companies were suspended or removed due to the implementation of strengthened C-TPAT security criteria. In addition, the percentage of cargo by value imported by participants in CBP trade partnership programs (C-TPAT and Importer Self-Assessment) dropped from 55.07% to 54.66%, though this was still well above the goal of 45%.

CBP notes that recently C-TPAT Tier 2 and 3 members became exempt from stratified compliance exams and that it is working to also exempt them from non-intrusive inspection exams in the near future. In addition, CBP and the Transportation Security Administration have conducted three of six planned joint validations/inspections of airports and air carriers. It is expected that the results of this pilot program will lead to CBP’s acceptance that TSA security assessments are commensurate with a validation site visit, meaning CBP will no longer have to conduct C-TPAT visits for that sector.

CSI – Container Security Initiative

CBP officers reviewed 10.8 million bills of lading and conducted 49,415 examinations of high-risk cargo in cooperation with host country counterparts under the Container Security Initiative. The percentage of such exams requested that were actually conducted rose for the third straight year to 98%, up from 96% in 2011. CBP notes that over the next two fiscal years it intends for CSI to become a hybrid of different operational models based on individual ports and host governments.

Cargo Screening
CBP did not meet its target for the percentage of inbound cargo identified as potentially high-risk by the Automated Targeting System that has been screened and had its entry status resolved prior to or during processing at a port of entry, but a specific figure was not given. CBP notes that reporting this measure in the land environment continues to be a challenge due to data accessibility and system data exchange issues.

Revenue Collection
CBP successfully collected 98.88% of all collectable revenue due from commercial imports that is directed by trade laws, regulations and agreements, down from 99.12% the previous year. Total collectible revenue is defined as total collection plus the estimated net under collection due to noncompliance with U.S. trade laws and regulations.
 

(STR Trade Report)

The International Trade Administration has issued a final rule that, effective May 10, will amend its regulations regarding the definition of factual information and the submission of factual information in antidumping and countervailing duty proceedings. This rule:

- modifies the definition of factual information to include five categories: (1) evidence submitted in response to questionnaires, (2) evidence submitted in support of allegations, (3) publicly available information to value factors under 19 CFR 351.408(c) or to measure the adequacy of remuneration under 19 CFR 351.511(a)(2), (4) evidence placed on the record by the ITA, and (5) evidence other than factual information described above;

- establishes specific time limits for the submission of information under each category to help prevent situations in which the ITA has to review large amounts of factual information when it is too late to adequately examine, analyze, conduct follow-up inquiries and, if necessary, verify the information; and

- requires submitters to specify the category of information they are submitting.

The ITA states that if parties find that an administrative record is lacking factual information they should explain what additional information they wish to submit, explain why it was not available for timely submission and request that the ITA accept it. If there is adequate time for rebuttal, comment, analysis and thorough consideration of the new, previously unavailable information and the ITA could potentially verify it, the agency may elect to permit submission. Otherwise, the reliability of such late-submitted information cannot be assured.

This rule will apply to any interested party submitting information to the ITA in AD/CV proceedings, which could include exporters and producers of merchandise subject to AD/CV proceedings and their affiliates, importers of such merchandise, domestic producers of like products, and foreign governments.
 

(STR Trade Report)

U.S. Customs and Border Protection has made available the following statistics concerning participation in and operations of the Customs-Trade Partnership Against Terrorism program as of April 1.

- There were 10,512 certified partners, including 4,338 importers (327 of which have been certified for tier 3 benefits), 3,057 carriers, 1,297 foreign manufacturers, 915 consolidators and third-party logistics providers, 845 customs brokers, and 60 marine port authorities and terminal operators.

- 22,492 total validations had been completed but the annual trend declined from about 3,100 in 2010 to about 2,400 in 2012. There had been 11,775 total initial validations (640 in 2012) and 10,717 revalidations (1,736 in 2012).

- There were mutual recognition arrangements between C-TPAT and the supply chain security programs of New Zealand, Canada, Jordan, Japan, Korea, Taiwan and the European Union as well as mutual recognition projects ongoing with Singapore, Israel, China, Mexico and Switzerland. The U.S. is conducting technical assistance projects with Malaysia, the Philippines, Guatemala, Colombia, Peru, Vietnam, the Dominican Republic, Costa Rica and India as well as capacity building training programs with Ghana and Kenya.

- There have been four rounds of joint validations with the General Administration of China Customs.
 

(STR Trade Report)

U.S. Customs and Border Protection has announced an expansion and modification of a general test concerning its Centers of Excellence and Expertise, which aim to facilitate the entry of merchandise imported by companies within certain industries. A notice concerning this test, including the application process and eligibility and selection criteria, is available in the April 4 Federal Register.

CBP’s goal is to incrementally transition the operational trade functions that traditionally reside with the ports of entry until they reside entirely with the CEEs. By focusing on industry-specific issues and providing tailored support for participating importers, CBP is seeking to facilitate trade, reduce transaction costs, increase compliance with applicable import laws, and achieve uniformity of treatment at ports of entry. CBP believes that providing broad decision-making authority to the CEEs for entry processing issues will better enable them to achieve these goals and is conducting the ongoing CEE test to determine if that is true. Read more here.